Enter an accrual (anticipated expense)
Find this screen
Open: Nominal > Enter Transactions > Accrual Journal Entry
How to
Enter an accrual
Open: Nominal > Enter Transactions > Accrual Journal Entry
- Enter the details of the reverse transaction. This posts the total value of the accrued expense to the balance sheet to reverse the periodic postings.
Reversal Date: Date of the reverse transaction. This is usually a date in the future.
- Total value: Estimated value of the actual bill.
- Reference and Narrative : For all the transactions.
- Specify the Transaction Analysis code, if required.
- Choose the nominal account for Balance Sheet postings. This defaults to the
- Choose the nominal account for Profit and Loss postings. This is usually the same nominal account as the
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Enter the Date and Value for each required periodic transaction.
The total value of the periodic transactions must equal the Total value of the
The routine suggests tomorrow as the first periodic date, plus dates for each subsequent posting at regular intervals.
- To save and post all the transactions, click Post.
Useful info
Set up a nominal account for accruals
To set up your
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Create a nominal account for your accruals to post the periodic transactions to.
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Set this as the default nominal account for
Open: Nominal > Create and Amend Accounts > Create New Nominal Accounts.
- Enter a Code and Name.
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Choose a report category.
This should have a type of
Open: Settings > Cash Book / Nominal Ledger > Default Nominal Accounts.
- Select the Balance Sheet tab
- Enter the code for the
About accruals
Use an accrual to budget for an upcoming expense that you normally pay in arrears but want to account for across a number of periods. These are usually used to cover costs such as gas or electricity where you are charged quarterly.
Periodic transactions are posted to account for the expense on your Profit and Loss each period. These are balanced against the Accruals account on your balance Sheet (where it is classed as a liability). A final reversing accrual journal is posted which cancels out the payments paid to the expense account and the liability on your balance sheet.
When you eventually receive the actual bill you can record it as an expense on your profit and loss without the worry of it being accounted for twice.
Applying an accrual
To apply an accrual you:
- Enter the accrual details. You must specify:
- The date on which the accrual periodic transactions will be reversed and the total amount of the accrual.
- The Balance Sheet nominal account that will temporarily hold the transaction. If you have a default accruals nominal account specified Sage 200 will automatically display this to you.
- The Profit and Loss nominal account into which the payment amount will be posted over the course of the accrual period.
- The number, amount and date of individual payments to be posted to the Profit and Loss nominal account.
- Post the payment that was accounted across a number of periods. You could post this as a:
- Purchase payment to a supplier account.
- Nominal payment (with or without VAT).
The company has a quarterly gas bill which is approximately £3000 per quarter. So that the entire £3000 payment does not skew the profit and loss for the month in which it is paid the company uses an accrual to spread the payment equally across the three months in the quarter covered by the bill.
The next bill is due in June so in April an accrual journal is created to post £1000 each month to the Profit and Loss. The following details are entered on the Create Accrual Journal Entry screen:
| Field Name | Entry made | Note |
|---|---|---|
| Reversal date | 15/06/2014 | This is the date on which Sage 200 will reverse the periodic transactions from the Profit & Loss nominal so that the actual payment can be posted. |
| Total value | £3000 | This is an estimated amount. You may not know what the actual amount will be so must use an educated guess as to what the bill will be. |
| Balance Sheet (Posting Account) | 2009 - Accruals |
This is the Balance Sheet nominal account from which the periodic transaction will be taken. There was no need to select a nominal account here as a default had been set for accruals and Sage 200 automatically displays it in this field. |
| Profit and Loss | 7201 - Gas | This is the nominal account on the Profit and Loss to which the periodic expense transactions will be posted and the actual payment will be made when the gas bill is paid. |
| Periodic Transactions | 3 X £1000 transactions dated to post each month |
These are the dates on which the periodic transactions will be posted from the Balance Sheet nominal account to the Profit and Loss nominal account. The first posts on 15/03/2014 and the final posts on the 15/06/2014. The actual bill will be paid on the 15/06 or very shortly after. |
The result of applying the accrual in this scenario
The Profit and Loss shows a £1000 increase for each month of the accrual period. Sage 200 then clears the accrued transactions so that when the actual payment is posted it will not be accounted twice.
What happens when
I post an accrual?
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An
Nominal Account Debit Credit (Balance sheet)
Expense Account
(Profit and Loss)
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Period transactions are posted to the following nominal accounts:
Nominal Account Debit Credit (Balance sheet)
Expense Account
(Profit and Loss)
Note: A single URN The unique reference number assigned to a complete transaction to assist in tracing the progress of the transaction through Sage 200. This number is 12 digits long and comprises of: 3 digits for the user number, 2 digits for the source module in which the transaction was created, and a 7 digit sequential reference number. is applied to all the transactions.